Can anyone teach me how to make a budget?

hackedoffatthem

I'm talking starting with the basics!

My husband gets paid monthly, I get MA every fortnight, and we get CB every 4 weeks. All our DD's go out on the 1st of the month but aside from that I'm not really sure how to handle our money into a sensible budget for other things. We have one joint account for all this but also hold a single account each with a different bank but they don't get used at the moment.

Tips greatly received!

olly300

Start here - http://www.moneysavingexpert.com/banking/Budget-planning

In reality I started years ago by writing down what I spent in a note book and the income I had.

I then worked out later on which is easier if you have more than one bank account, to ensure I put enough money aside monthly to cover all DDs.

Then to manage around those.

hackedoffatthem

That tool was really useful and good news is it showed we underspend by 14%.

I think the key to better planning might be as you've suggested using multiple accounts. We have the money but fail to forward think so for example instead of popping money aside for yearly expenditures like MOT, car taxes etc, we have to scrabble around for it in the month it's due. Always seem to be playing catch up because we have no savings/budgetting.

As I said the money is here but the organinsing is not so this is the plan for 2011!

TRYINGTOSWIM

We are in a similar position, there should be more than enough money to cover everyhting yet we are always scratting around and never have any money. oh gets paid weekly , but ctc and chb four weekly.
my plan for 2011 is to get organised, have set up a seperate account for all dd to come out of but thats it so far. tips appreciated here too

CLAPTON

use the budget planner that Olly posted up
the key to budgeting is to learn to save a little
next is to actually write down what you spend each month and compare that with the budget
if you have a 4 weekly income then try treating that as the money for a whole month and then trying to save the 13th lot of 4 weeks money

david_hellier

The real function of a budget is to prevent overspend. The encouragement of overspending by the banks is the main problem with the economy, and they will look for ways to perpetuate this, for example by the introduction of contactless cards. The complete elimination of paper money is their long term aim so we as consumers must pay hawkish attention to exactly how much is available to spend.

One of the best ways to tackle this is to use the weekly subtraction method. Firstly work out all your income. If your income is monthly then divide this by 4.33, this will give you your weekly income. Note it.

Then work out your monthly essential outgoings, but exclude food (more later). Divide this by 4.33 to give you your weekly out goings. Note it.

Take the outgoing figure from the incoming figure. This is the weekly Start amount available to spend on anything else including food.

Get any little notebook and write the Start figure in it at the start of the week. As you spend or withdraw cash deduct it as you go. Try to get to the end of the week with some left in it and carry this forward to the next week and add it to the new Start figure.

Using this method ensures you do not overspend. I suggest you include food in the Start figure because the amount we spend on it can vary widely. My personal experience shows allowing a specific amount for food is impractical, however, it's up to you.

This method also requires you to effectively ignore your bank balance, because it is meaningless on a day to day basis. What you should see is it increasing steadily.

Also remember to include any od charges, interest or other fees in the essential outgoing list, otherwise overspending will continue.

Other top tips: stop using credit cards for further spending and make FIXED repayments, never the minimum.

I have an excel spreadsheet which can work out the Start figure if you PM me with an email address.

Wishing you all a happy new, prosperous, debt free New Year.

Dave